SWARAN SINGH KANWAR Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) THESE are three connected writ petitions and can be disposed of by a common judgment. The petitioners are Kartas of HUFs and are assessed to wealth -tax. The net wealth of each of the petitioners consists of shares held in a number of companies, some of which are quoted on the stock exchange and some are not quoted. The dispute in the present case arises out of common facts and it may be sufficient to set out the brief facts in C. W. No. 968/79 to illustrate the position.

(2.) FOR the asst. year 1970 -71 (valuation dt. 31st March, 1970) the petitioner submitted a return of net wealth of a sum of Rs. 6,42,683. Among the assets owned by the petitioner were 145 equity shares of Raunaq & Co. (P) Ltd. The face value of each of these shares was Rs. 1,000 but since the said company was a private company and its shares were not quoted in any recognised stock exchange, the market value of its shares had to be computed under r. 1D of the WT Rules, 1957. The petitioner accordingly valued these shares at Rs. 850 each. In support of this valuation the balance sheet of Raunaq & Co. (P) Ltd. was also filed before the WTO. On 6th Jan., 1975, the WT assessment was completed by the WTO accepting the valuation, at Rs. 850 per share of these shares, made by the assessee.

(3.) AFTER hearing Mr. Anoop Sharma, counsel for the petitioner, and Mr. B. N. Kirpal, counsel for the respondent, we are of the opinion that the notices issued under S. 17(1)(a) were clearly without jurisdiction. It is common ground that the shares had to be valued under r. 1D of the WT Rules which in the case of a company of the present kind is put down as follows : "The market value of an unquoted equity share of any company, other than an investment company or a managing agency company, shall be determined as follows :